HyperNoir – Startups in Paraguay are as interesting as this often ignored corner of the Latin American ecosystem is.
Yet, there is a common trend to be seen as in the rest of the region. It was one we detected almost exactly a year ago when we wrote a market map of fintech startups in this South American country.
No matter where you are in this credit scarce region, fintech seems to be king.
Startups in Paraguay
So, do startups in Paraguay have it better or worse when compared to the rest of Latin America? The boring answer is; depends.
The less boring answer is that Paraguay does stand out from the Latin American norm. The country has “no issues at all with personal safety”, according to an OECD report. This is an important consideration in one of the most violent regions on Earth; the most violent if one considers there are no declared inter-State wars.
However, the country clearly understands that little can compensate for the smallness of its market. This is especially true given that it stands next to giants like Brazil and Argentina. Therefore, Paraguay is doubling down on making itself attractive to investors and founders alike.
The country has very low taxes thanks to its pro-business and stable government. Although, Paraguayans still feel that the State is more corrupt than it ought to be. Nevertheless, this drawback may be balanced out for startups by the fact that Paraguay ranks highly on property rights and crypto-friendliness.
Now, though, the global pandemic threatens this oasis of relative stability. SMEs in Paraguay are threatened, since, in the past two months, barely 15 percent of loans asked by companies were granted. For many startups, a creditline denial will be equivalent to a death sentence as a second wave of lockdowns rages across the world; depressing global demand.
At least Paraguay can console itself for having dealt with the pandemic better than most of its neighbors.
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